On-premise and hosted are the two main classes of customer relationship management solutions available today. Although the tools offered by both of them are almost the same there are many differences in terms of cost, implementation, performance and customization. This article will help you to know both on-premise and hosted CRM solutions are differentiate between them, and can guide to choose the right CRM for your business area.
On-premise CRM solutions are licensed stand-alone locally managed customer relationship management solutions. Companies purchase them from the software providers and install the on client/company computers to run special tasks. Hosted CRM solutions are on the other hand mostly open-source remotely manage ready-to-go solutions. They do not require purchasing, the CRM vendors allow the users to use solutions installed on their computer by charging a monthly usage fee. Hosted CRM solutions are the typical example of Software-as-a-Service or SaaS.
The difference between on-premise and hosted CRM solutions are increasing day by day. It is estimated that most small to medium size businesses prefer hosted solutions and large one prefer on-premise solutions. There are many reasons for it. And below are some most prominent ones.
We will start with cost, the most important factor in any business. Large corporations usually have good financial background are can afford great initial investments for purchasing and implementing the software, and also for setting-up servers, databases and internal networks. They usually have hundreds or thousands of users, which rules out the opportunity to subscribe software with monthly fee per user. Hosted CRM solutions do not require any upfront investment or maintenance cost. The limited number of users in small scale companies makes hosted CRM an excellent choice to avoid large-scale investments.
The second factor to consider is the data security and data back-up. On-premise systems do not require any intra-company data transfer, except those initiated by the user himself. All documents are saved and treated in local database which greatly enhances the data security, which is very important for many big companies. On the other hand small scale businesses do not have that much important data; so they can host this data in a remote database, which is maintained by the vendor. Hosted CRM solutions offer almost same level of data security as on-premise systems by using secured data transfer pathways and encrypted data.
Other reasons include technical knowledge and easy to implement. On-premise CRM implementation require the assistance of some skilled workers who are good in software development and network administration. The implementation period is also fairly lengthy for on-premise systems. These two factors work against small businesses. Hosted CRM solutions use web based graphically enhanced easy-to-follow interface for software implementation and are ready-to-go systems, just after the completion of sign-up process.